For investors and their advisors who cannot simply sit still and watch a bear market consume all that they have built over the years, for those who have got to proactively “do something,” I offer a simplistic version of momentum following. Over the years that I have been using this data to actively manage a mutual fund portfolio, the results have been staggeringly impressive. In 2000, the average equity mutual fund category was transformed from a loss of 2.81% to a gain of 10.82%, and the S&P 500 Composite changed from -9.02% to +0.83%.
Following a moving average is purely a technical approach to analyzing the market, with no regard for fundamental analysis. The goal is to be in the market for “most of the bull” and out of the market for “most of the bear.” Has it worked? You bet it has! Check it out.
